During 2019–20, an estimate of $83.5 billion was spent on Australia's public and private hospitals, with $35.9 billion (43.0%) funded by state and territory governments and $31.4 billion (37.6%) by the Australian Government. The remaining $16.2 billion (19.4%) came from non‑government sources (Figure 24).

As outlined in the links belows, these estimates do not include some spending by the Australian Government through the MBS and PBS on services delivered in hospitals (up to $4.8 billion, including $2.1 billion in public hospitals and $2.7 billion in private hospitals) (see MBS, PBS in public hospitals and Australian National Health Account: concepts, methodology and data sources for more detail).

Spending on hospitals in 2019–20 was 2.9% higher than in 2018–19 and below the 3.6% average annual growth for the decade. The increase in 2019–20 resulted from increased funding by the Australian Government (7.9%), states and territories (5.1%) in real terms while spending by non-government entities declined by 9.5%. This increase of hospital spending was not accompanied by an increase in hospital activity, as the number of hospitalisations, emergency department and outpatient care services actually declined in 2019–20 (AIHW 2021a, 2021b, and 2021c). Note that growth calculations for Australian Government public hospital funding do not include additional components of MBS and PBS spending as stated above.

Figure 24: Spending on hospitals, by source of funds, constant prices⁽ᵃ⁾, 2009–10 to 2019–20

The line graph shows that spending on hospitals increased between 2009–10 and 2019–20 for the Australian Government, state and territory government and non-government sector. State and territory governments had the highest spending on hospitals in every year over the decade. State and territory government spending increased from $25.5 billion in 2009–10 to $35.9 billion in 2019–20. Spending by the Australian Government on hospitals slightly decreased from $24.3 billion in 2011–12 to $23.3 in 2012–13 but then increased every year to $31.4 billion in 2019–20. Non-government spending increased most of the years over the decade, from $11.4 billion in 2009–10 to $17.8 billion in 2018–19 before slightly decreasing to $15.2 billion in 2019–20.